BBB Warning: “Secret Sister” Gift Exchange is Illegal

The Better Business Bureau is reminding consumers that the online “Secret Sister” gift exchange and similar invitations are illegal and should be ignored. The campaign, which was first big in 2015, has again been circulating on social media sites, particularly Facebook.

The post claims that participants will receive up to 36 gifts in exchange for sending one gift valued at $10. Users are encouraged to invite others to participate in the holiday gift exchange, where they will receive information on where to mail gifts.

But there is one big problem with gift chains like “Secret Sister” – they are pyramid schemes. The U.S. Postal Inspection Services says that gift exchanges are illegal gambling and that participants could be subject to penalties for mail fraud. Pyramid schemes are illegal, either by mail or on social media, if money or other items of value are requested with assurance of a sizable return for those who participate.

Here is how this scheme works: If a consumer purchases one gift for a stranger, she will receive as many as 36 gifts in return. This type of gift exchange may seem reasonable enough in theory: six friends invite six more friends, who all send gifts to the participant in spot 1 before that person’s named is removed. This process repeats itself with the participant in the 2 spot, and so on. Of course, starting this gift exchange comes with a catch – you need to disclose your personal information, such as your home address.

If you receive a chain letter by mail, email, or social media, especially one that involves money or gifts, ignore it. Report the post to Facebook by clicking on the three little dots in the upper right corner of the post.